Lloyds Bank re­fuses to pay le­gal costs of firm in HBOS fraud case

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

LLOYDS Bank­ing Group has clashed with an in­de­pen­dent re­view into the HBOS Read­ing scan­dal by re­fus­ing to pay the le­gal costs of a firm in­vited to give ev­i­dence to the in­quiry.

The re­view headed by Dame Linda Dobbs, a for­mer High Court judge, is ex­am­in­ing whether bosses at Lloyds prop­erly in­ves­ti­gated claims that of­fi­cials in the Read­ing branch of Hal­i­fax-Bank of Scot­land (HBOS) de­stroyed cus­tomers’ busi­nesses for per­sonal gain.

Lloyds has re­fused to pay the le­gal costs of a firm in­volved in a dis­pute over the in­sol­vency of one of Europe’s big­gest ho­tels even though Dame Linda be­lieves the firm has ev­i­dence rel­e­vant to her re­view.

Lloyds ap­pointed re­ceivers in 2010 over HSS, owner of the Ci­ty­west Ho­tel in Dublin and a busi­ness customer of Bank of Scot­land (Ire­land), which Lloyds ac­quired as part of its dis­as­trous 2009 takeover of HBOS.

Lansdowne Francs, an Ir­ish ac­count­ing firm, ad­vised HSS on a re­struc­tur­ing plan that was re­jected by the bank-ap­pointed re­ceiver.

It claims the bank pushed HSS into in­sol­vency by reneg­ing on an of­fer to lend it €30m (£27m) and that the re­ceiver sold the as­sets in 2014 to a con­sor­tium con­nected to a for­mer Lloyds di­rec­tor.

Lansdowne Francs also claims the re­ceiver wrongly sold land that was never owned by HSS, as it was held by one of the com­pany’s direc­tors.

Dame Linda in­vited the firm to con­trib­ute ev­i­dence to her re­view.

She wrote: “I be­lieve it will be help­ful to speak to you as you will have in­for­ma­tion which is rel­e­vant to the re­view. It is pos­si­ble that the FCA [Financial Con­duct Au­thor­ity] may then also wish to speak to you about any rel­e­vant find­ings.”

Dame Linda said Lloyds had confirmed it would pay the firm’s rea­son­able le­gal fees.

The bank is now re­fus­ing to pay be­cause HSS was not a vic­tim of the HBOS Read­ing scan­dal for which six peo­ple were con­victed and Lloyds was or­dered to pay a £46m fine.

A Lloyds spokesman said: “HSS was not a vic­tim of the HBOS Read­ing fraud. While we ap­pre­ci­ate that HSS may feel un­happy with cer­tain mat­ters re­lat­ing to its re­ceiver­ship, as its ex­pe­ri­ences are un­re­lated to HBOS Read­ing we do not be­lieve it is rea­son­able to meet its le­gal costs in this in­stance.”

He said it was for the re­ceiver to con­sider re­struc­tur­ing pro­pos­als and ob­tain the best price pos­si­ble from the sale of the busi­ness.

The Dobbs Re­view de­clined to com­ment.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.